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Eyes on Trade is a blog by the staff of Public Citizen's Global Trade Watch (GTW) division. GTW aims to promote democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor "free trade." Eyes on Trade is a space for interested parties to share information about globalization and trade issues, and in particular for us to share our watchdogging insights with you! GTW director Lori Wallach's initial post explains it all.

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May 24, 2013

Chile's Former Lead TPP Negotiator Warns of TPP as "Imposition" and "Threat"

The critics of the Trans-Pacific Partnership (TPP) -- the proposed expansion of the much-decried NAFTA model of "trade" being negotiated by the U.S. and 10 other Pacific Rim countries -- are an increasingly motley bunch. The list includes members of Congress, small businesses, unions, techies, family farmers, state legislators, enviromental activists, health experts, religious groups, food safety advocates, and more than a few Star Wars fans.

One more category of people has now been added to the TPP-wary ranks: former TPP negotiators.

Last week, Rodrigo Contreras, Chile's lead negotiator for the TPP until two months ago, published a shakedown of the sweeping deal in a leading Peruvian magazine (Caretas) as TPP negotiations were getting underway in Peru. Writing principally to the Latin American governments negotiating the TPP (Chile, Peru, and Mexico), the former top TPP negotiator warned:

It is critical to reject the imposition of a model designed according to realities of high-income countries, which are very different from the other participating countries. Otherwise, this agreement will become a threat for our countries: it will restrict our development options in health and education, in biological and cultural diversity, and in the design of public policies and the transformation of our economies. It will also generate pressures from increasingly active social movements, who are not willing to grant a pass to governments that accept an outcome of the TPP negotiations that limits possibilities to increase the prosperity and well-being of our countries.

Contreras spelled out the particular areas that he sees as a "threat" if an outside model is "imposed" by "high-income countries" (read: U.S.):

We must avoid limits on access to knowledge available on the Internet and not exacerbate intellectual property protection for the downloading of online content. Nor should we accept the excessive expansion of copyright protection terms for books, movies or music, which would limit their availability in libraries and schools, and would make them more expensive for lower income people. The
extension of drug patent protections beyond the current terms, or the
restriction of challenges to frivolous patent applications, would delay the
availability of generic drugs and increase the cost of medicines. Public
health budgets and access to health services for the most vulnerable would be
affected in our countries...[and] it
does not makes sense to further liberalize capital flows, depriving us of
legitimate tools to safeguard financial stability.

Perhaps the TPP's embodiment of these threats is why Contreras stepped down from his top TPP negotiating post. Yves Smith over at Naked Capitalism (hat tip back to her hat tip) suspects so:

It’s widely believed that [Contreras] left his post voluntarily. He’s held in high esteem not just in Chile but among his fellow trade negotiators. His departure left people on the trade beat scratching their heads. It now appears probable that the reason for his resignation was that he saw where the TPP was likely to go and didn’t want his name attached to it.

As the "imposed" model that Contreras worried about takes root in the TPP negotiating text, amplifying its threat to consumers, workers, and the environment, perhaps we'll see more conflicted TPP negotiators follow Contreras' principled lead.

-----------------------------

Here is the complete translated text of Contreras' statement, published in Caretas:

May 23, 2013

USDA Stands Firm on Consumer Meat Labels, but Will the WTO Continue its Anti-Consumer Legacy and Authorize Trade Sanctions?

Today,
on the deadline for the United States to comply with the World Trade
Organization’s (WTO) 2012 ruling against the popular U.S. country-of-origin labeling
(COOL) meat labeling program, the U.S. Department of Agriculture (USDA) announced
it will strengthen rather than eliminate or weaken the consumer label. The
welcome decision raises the critical question: will the WTO accept the change supported
by 87 percent of the U.S. public or continue its legacy
of undermining consumer safeguards?

Mexico
and Canada, the countries that won a final June
2012 WTO ruling against COOL, stated that they
opposed the proposed U.S. resolution to the case released in March, which
closely aligns with today’s final rule, and would challenge it as a WTO
violation. Under WTO rules, if the countries contest the new U.S. regulations,
the WTO will decide whether the new U.S. policy complies with WTO requirements,
or whether Mexico and Canada may impose trade sanctions against the United
States.

Consumer
groups have applauded the USDA approach, which stands in stark
contrast to past U.S. responses to WTO rulings, which have involved weakening
public interest safeguards ruled against by the WTO. The new USDA rule
eliminates the WTO violations identified in this case and complies with the WTO
ruling, but does so by strengthening
the consumer labels.

If
the WTO accepts the strengthening of COOL as compliance with its final ruling,
it will mark a stark departure from precedent. WTO lawyers are accustomed to
seeing governments scuttle constituent interests and roll back domestic
policies in an attempt to comply with WTO directives. If the WTO does not
accept USDA’s new policy and instead authorizes trade sanctions against the
United States, it will reinforce the anti-WTO public sentiment spurred by last
year’s spate of anti-consumer rulings.

Mexico
and Canada Openly Threaten Retaliation

The
question of the WTO’s determination of U.S. compliance is relevant because
Mexico and Canada may well challenge USDA’s final rule, shifting the decision
back to a WTO panel. When USDA released its rule change proposal in March,
Canada’s Agriculture Minister Gerry Ritz minced no words in stating: “Our
Government is extremely disappointed with the proposed
regulatory changes put forward by the United States today with respect to
Country of Origin Labeling. We do not believe that the proposed changes will
bring the United States into compliance with its WTO obligations.” A letter
from the Mexican Embassy identically stated that the regulatory change “will
not bring the United States into compliance with its WTO
obligations.”

Both
Canada and Mexico have already threatened retaliatory action, which the WTO will
authorize if it deems that USDA’s new rule to provide consumers with further
information about their food does not satisfy WTO rules. The list of
punishments that the WTO could impose on the United States for maintenance of
country-of-origin meat labels include U.S. taxpayer compensation to Mexico and
Canada, or authorization of trade sanctions by those countries against the
United States. Mexico has already voiced its support for the latter, stating in
March that if USDA would not abandon its proposed strengthening of COOL, “Mexico
would be forced to pursue the available mechanisms for withdrawing trade
benefits from the United States.”

The
open threats of retaliation from Mexico and Canada come while both countries
are engaged in negotiations with the United States on the Trans-Pacific
Partnership (TPP), the sweeping “free trade” agreement (FTA) that the Obama
administration is currently negotiating with 10 Pacific Rim countries. The hard
line that Mexico and Canada appear ready to take against the United States on
COOL will at least significantly complicate the TPP negotiations. Most
observers, including TPP proponents, have already given up hope that the
negotiating governments will meet their goal of concluding negotiations by this
October’s Asia-Pacific Economic Cooperation summit. Fresh tension from the COOL
dispute will only further encumber TPP negotiations.

Background
on COOL, the WTO Dispute and the USDA Rule

After
50 years of U.S. government experimentation with voluntary country-of-origin
meat labeling and efforts by U.S. consumer groups to institute a mandatory
program, Congress enacted mandatory labeling for meat in the 2008 farm bill.
The policy requires American retailers to label certain foods with the country
(or countries) in which animals were born, raised and slaughtered. Polls
indicate that 90
percent of the U.S. public approves of COOL.

In
their successful WTO challenge, Mexico and Canada argued that the mandatory
program violated the limits that the WTO sets on what sorts of product-related
“technical regulations” WTO countries are permitted to apply. Canada and Mexico
suggested that the United States should eliminate mandatory labeling and return
to voluntary COOL, or to standards suggested by the Codex Alimentarius, which
is an international food standards body at which numerous international food
firms play a central role. Neither option would provide U.S. consumers with the
same level of information as the current U.S. labels.

Instead
of pursuing such a watering down of the popular program, USDA proposed a COOL rule
change in March 2013 that would strengthen the labeling regime to address the
problems identified in the WTO’s ruling. Today’s final rule from USDA maintains
that approach. The WTO’s Appellate Body ruled that the program’s requirement
that meat producers gather a greater amount of information about meat origins
than is ultimately conveyed to consumers downstream violated WTO requirements. To
address this concern, USDA’s new rule will offer consumers more precise labels that
specify the country in which each step in the meat production process occurred.
The change will better fulfill COOL’s policy objective and consumers’ rising
demand for greater transparency regarding the production of their food, while
also satisfying the issues raised in the WTO’s final ruling.

May 22, 2013

RECAP FROM LIMA: Experts, Activists, and Peruvian Members of Congress Rally Against the TPP

As the 17th round of the Trans-Pacific Partnership (TPP) negotiations
continue in Lima this week, objections to the proposed sweeping NAFTA-style deal (with 10 Pacific Rim countries) have been heard from a diverse
spectrum of voices, including experts, activists, and even a Peruvian Member of Congress.

Last Thursday, a public forum was held in Lima to discuss concerns about the TPP. Advocates and experts, including Global Trade Watch's own Melinda St. Louis, discussed topics ranging from intellectual property and internet freedom, to labor standards and the investment chapter.

The audience also heard from Verónika Mendoza, a Peruvian Member of Congress,
who expressed concern about a negotiation process that locks out citizen and
government participation. She cited investor-state cases such as Renco/Doe Run and Eli Lilly as indicators that Peru needs to take a strong position to protect environmental health in the face of proposed investment privileges and protect access to medicines in the face of proposed monopoly patent expansions.

On Friday, activists took to the streets to protest the TPP negotiations. Protestors wore masks to symbolize the danger the TPP poses to access to medicines and
health and chanted “No es negociable!” (Not negotiable!). The protest was covered by several prominent Latin American news outlets, including CNN,
La
Pr1mera, the Associated
Press, and many others. La Mula posted a video
of the protest.

After the protest, advocates organizing around the TPP negotiations in Lima hosted a webinar to update activists from
around the globe and answer questions about the TPP. Click
here to check out a video of the webinar if you missed it.

Though the negotiating round in Lima round is coming to an end, many Peruvians -- including the citizens of La Oroya -- still have to live with the damaging effects of the investor privileges embodied in "trade" pacts. Australia has already refused to sign on to such privileges in the TPP. Hopefully Peru will follow suit. In the meantime, it is crucial that civil society around the globe carry Peruvians' message to their own governments: our right to health, a clean environment, fair labor standards, and internet freedom are not negotiable.

Several Peruvian organizations have joined together to
launch the No
Negociable! (Not Negotiable!) campaign to highlight the grave threats that
the TPP poses to Internet freedom, the environment, workers' rights, and
public health.

Events kicked off on Wednesday when Peruvian activists took
part in a press conference to express
their concerns about the TPP:

------------------------------------------------------------------

+Julia Cesar Cruz (Red Peruana de Pacientes y Usarios),
representing Peruvians living with HIV, tuberculosis, and cancer, said that
patients of these diseases and others are terrified about how the TPP proposals
could affect the lives of those living with chronic illness. She called on
President Humala to follow through on his campaign promise to guarantee access
to medicines for Peru’s poorest.

+Jose de Echave (CooperAcción) expressed concerns about
how TPP’s investment chapter would allow crucial policies to protect indigenous
communities and the environment to be challenged.

+Juan Jose Gorritti (CGTP) rejected a trade agreement model
that does not respect workers' rights and encourages a race to the bottom.

+Crisólogo Cáceres (ASPEC) expressed concerns about how the TPP would impact consumer rights and privilege corporations over consumers.

+Alejandra Alayza (RedGE) spoke about a Peruvian petition that will be sent to President Humala. (Spanish speakers can find a video of Alayza speaking at the press conference here).

-------------------------------------------------------------------

Several other civil society events have been planned during the round, including an all-day public forum, a protest, and the delivery of
signatures to President Humala.

Today: You can also learn more about what is happening on the ground by connecting to a webinar hosted by activists in Lima. To take part in the interactive webinar, join this link TODAY, Friday, May 17th, at 5 PM EST.

Critical
comments were submitted by a panoply of consumer, farmer, labor, environmental,
health and tech groups concerned about the negotiations being used to roll back
critical public interest safeguards. In addition, nearly 10,000 comments were generated
in 32 hours after an email sent by Rep. Alan Grayson (D-Fla.) alerted the
public that the deal is slated to include controversial “investor-state”
provisions. The investor-state proposal would
empower foreign corporations
to skirt U.S. legal systems and directly challenge domestic health,
environmental and other public interest policies before extrajudicial foreign
tribunals authorized to order taxpayer compensation. The investor-state system
has generated controversy across the political spectrum. Conservatives have objected
to the notion that the United States would be subjected to the jurisdiction of
United Nations and World Bank tribunals. Progressives have viewed the system as
a backdoor means to attack domestic health and safety policies.

To
date, most U.S. agreements including investor-state enforcement have been with
developing countries. TAFTA would break that mold, empowering corporations to circumvent
the U.S. and EU court systems, not typically criticized for being unfriendly to
investors, to attack U.S. and EU policies in extrajudicial tribunals. As a result,
foreign firms operating in the United States would enjoy greater rights than those
provided to domestic firms. Moreover, because many European firms are
established here, U.S. taxpayers would face unprecedented liability from
investor-state suits, in contrast to past U.S. pacts with developing countries whose
firms have relatively few investments in the United States.

In
contrast to the bulk of public comments on TAFTA, the four witnesses presenting
to the House Ways and Means Trade Subcommittee in Congress’ first hearing today on
proposed TAFTA negotiations all represent business interests. This includes two
witnesses representing the trans-Atlantic coalition of large corporations that
has pushed for TAFTA negotiations for years. The business interests view TAFTA
negotiations as a means to eliminate an array of consumer, environmental and
other public interest safeguards that they have identified as “trade
irritants.” The corporate agenda is closely mirrored by the official framework
for talks announced in February in a report of a high-level U.S.-EU government
commission, advised by many of the same corporate interests.

Despite
growing public scrutiny of the TAFTA
proposal, President Obama met this week with British Prime Minister David
Cameron, to discuss how to rush the completion of this sweeping “trade” agreement
by the end of next year. Obama and Cameron announced plans to launch formal
talks during the
G8 Summit in Northern Ireland next month.

What Generated 10,000 Comments in
32 Hours: Proposed Inclusion of the “Investor-State” System that Would Empower Foreign
Corporations to Challenge the U.S. Government in Extrajudicial Tribunals, Undermine
Domestic Public Interest Policies, and Cost U.S. Taxpayers Millions

U.S.
and EU officials have confirmed that they plan to include in TAFTA a mechanism included in prior U.S. “free trade” agreements (FTAs)
called “investor-state dispute resolution.” This mechanism, which is facing growing controversy in many countries, elevates
foreign corporations to the level of sovereign governments, empowering them to
privately enforce the terms of a public treaty. This is done with trade pact
terms that authorize individual foreign firms and investors to skirt domestic
laws and courts and directly challenge signatory countries’ public interest
policies before foreign tribunals, demanding taxpayer compensation for claims
that those policies undermined investors’ expectations. The cases are decided
by panels comprised of three private sector attorneys, unaccountable to any
electorate, who rotate between serving as "judges" and bringing cases
against governments for corporations.

Foreign
investors have used the broad “rights” granted by this system, which are
superior to those afforded to domestic firms, to demand taxpayer compensation
for environmental, energy, land-use, toxics, water, mining, labor, and other
non-trade domestic policies that they allege undermine their “expected future
profits.” A recent Bloomberg exposé “Coup
d’Etat to Trade Seen in Billionaire Toxic Lead Fight” details one
such case under the U.S.-Peru FTA.When
an investor-state tribunal rules in favor of the foreign investor, the
government must hand the corporation an amount of taxpayer money decided by the
tribunal. There is no appeal mechanism. Even when governments win, they often
must pay for the tribunal’s costs and legal fees, which average $8 million per
case, wasting scarce resources to defend public interest policies against corporate
challenges.

The
investor-state system was initially established to provide a venue for foreign
investors to obtain compensation when a government expropriated an investment
in a country that did not have a well-functioning domestic court system. In the
past, it was included in pacts between a developed and developing country with
the developed country firms launching investor-state cases against developing
country governments. The United States was not exposed to significant liability
under this regime because the only agreement that included a major capital-exporting
country was NAFTA. Ninety percent of investor-state challenges against the
United States under NAFTA have come from Canadian firms. Inclusion of this
regime in an FTA with the EU would expose U.S. taxpayers to enormous new
liabilities.

The
global World Trade Organization rules do not include private enforcement. Thus,
EU corporations currently do not enjoy greater legal privileges than U.S. firms
and cannot directly challenge the U.S. government in foreign tribunals over U.S.
domestic policies. If TAFTA is enacted with investor-state provisions, EU
corporations would be newly empowered to demand U.S. taxpayer compensation for being
required to comply with the same policies enacted by Congress and state
legislatures that apply to domestic firms. U.S. corporations would gain the
same privileges in EU countries.

Growing Public Outcry over TAFTA

When Rep. Grayson alerted citizens of
TAFTA’s proposed inclusion of the investor-state regime, nearly 10,000
individuals submitted comments within 32 hours to denounce the extreme
provision as an affront to democracy and the public interest. In addition, more
than 370 groups and individuals filed concerns and remarks on the deal in
response to USTR’s invitation for public input. Below are links to comments
submitted by the diverse array of organizations concerned about TAFTA’s threats
to food safety, climate change policy, family farmers, Internet freedom, workers’
rights, access to medicines, financial regulation and other critical public
interest objectives.

May 09, 2013

Bloomberg: "Coup d’Etat to Trade Seen in Billionaire Toxic Lead Fight"

Percy Ramírez / Oxfam America

Today, Bloomberg published an in-depth
piece highlighting the secretive public policy “coup d’etat” that allows corporations to use trade agreements to attack
domestic health, environmental, and other public interest policies
they feel undermine their ability to make a profit. The use of this "investor-state" system, which
was once considered a last resort for companies that had been wronged by
countries with weak legal infrastructure, has exploded
in recent years as a first-resort way to circumvent strong domestic legal systems. In 2012, corporations used the system to launch a record-breaking 62 new cases against sovereign governments.

Outlined in the article are some of the most egregious
cases, including that of Doe-Run/Renco,
the company that, after refusing to fulfill its contractual obligations to clean up the
pollution of a lead smelter that caused lead poisoning
in 99.7%
of the community’s children, is now suing Peru under the Peru-U.S. "free trade" agreement (FTA) for $800 million. The story also mentions the record-breaking $1.8 billion judgment
that Occidental Petroleum Corp. won against Ecuador last year -- a staggering penalty imposed on Ecuador's taxpayers that
amounts to 16%
of the country’s external debt.

As the number of investor-state cases balloons, more and more
countries are expressing concerns and opting out of investor-state provisions.
Despite U.S. pressure, Australia
has refused to be a party to the investor-state provisions in the Trans-Pacific Partnership (TPP). In April, 12
Latin American governments met at a summit focused on investor-state concerns, resulting in a declaration by seven of the governments to coordinate efforts to replace the investor-state regime. Bolivia
and Venezuela
have already pulled out of the International Centre for Settlement of
Investment Disputes (ICSID), and in March, Ecuador moved to annul
its Bilateral Investment Treaty (BIT) with the US. Other countries such as Brazil,
India, and South
Africa have either outright rejected the investor-state regime or have made strides to abolish investor-state clauses. Hopefully, these steps forward, combined with
increased media attention, will motivate more countries to discard harmful investment
provisions that threaten crucial environmental, health, and regulatory policies
aimed at improving the lives of the majority.

May 08, 2013

As Korean President Addresses Congress Today, First Year of Korea Free Trade Agreement Data Shows U.S. Exports Down, Trade Deficit with Korea Up

After First Year of U.S.-Korea FTA, U.S. Exports to
Korea Down 10 Percent, Imports from Korea Up and
Deficit With Korea Swells 37 Percent, Contradicting Obama Promises of U.S. Export and Job Growth

Just-released government trade data, covering the first year
of implementation of the U.S.-Korea Free Trade Agreement (FTA), shows a
remarkable decline in U.S. exports to Korea and a rise in imports from Korea,
provoking a dramatic trade deficit increase that defies the Obama
administration’s promises that the pact would expand U.S. exports and create
U.S. jobs, Public Citizen said today.

The coincidence of the dismal trade
data coming out just before the Korean president’s Wednesday address to a joint
session of Congress can only heighten attention to the gap between the
administration’s promises and the outcomes of its trade agreements.

“The Korea pact’s damaging outcomes
being the opposite of the administration’s promises will certainly complicate
the administration’s current efforts to use the same claims about export
expansion to persuade Congress to delegate away its constitutional trade
authority or to build support for the administration’s next trade deal, a
massive 11-nation Trans-Pacific Partnership (TPP) based on the same model,”
said Lori Wallach, director of Public Citizen’s Global Trade Watch.

U.S. export growth to countries with NAFTA-style pacts like the U.S.-Korea FTA has
been particularly lackluster; growth of U.S. exports to countries that are
not FTA partners has exceeded U.S. export growth to countries that are FTA
partners by 38 percent over the past decade.

In contrast to
the Obama administration’s promise that the U.S.-Korea FTA would mean “more
exports, more jobs,” U.S. goods exports to Korea have dropped 10 percent (a
$4.2 billion decrease) under the Korea FTA’s first year, in comparison to the
year before FTA implementation. U.S. imports from Korea have climbed 2 percent
(a $1.3 billion increase). The U.S. trade deficit with Korea has swelled 37
percent (a $5.5 billion increase). The ballooning trade deficit indicates the
loss of tens of thousands of U.S. jobs.

“Most Americans will not be shocked
that another trade agreement has increased our trade deficit, because they know
that these NAFTA-style deals are losers, but anger toward the politicians who
keep supporting these deals is soaring,” said Wallach. “The question is why any
member of Congress would buy the same tired promises that once again have
proven false and cede to the administration’s demands that Congress give away
its constitutional authority over trade to allow the administration to Fast
Track into effect yet another deal, TPP, that will increase our trade deficit
and cost U.S. jobs.”

The decline in U.S. exports under the Korea FTA contributed to an overall disappointing
U.S. export performance in 2012, placing the United States far behind
Obama’s stated goal to double U.S. exports by the end of 2014. At the sluggish
2012 export growth rate of 2 percent, the United States will not achieve the
president’s goal until 2032, 18 years behind schedule.

“The sorry Korea FTA numbers beg the question: How can the administration call
for a rebirth of American manufacturing and job growth while pushing the TPP, a
sweeping deal that would expand the failed Korea FTA model to low-wage
countries like Vietnam, ban Buy American provisions and offshore tens of
thousands more U.S. jobs,” said Wallach.

Many of the sectors that the Obama administration promised would be the biggest
beneficiaries of the Korea FTA have actually been some of the deal’s largest
losers:

U.S. pork exports to Korea have declined 24 percent
under the first year of the FTA relative to the year before FTA
implementation.

U.S. beef exports have fallen 8 percent.

U.S. poultry exports have plunged 41 percent.

The U.S. deficit with Korea in
autos and auto parts increased 16 percent in the first year of the FTA. U.S.
auto imports from Korea have surged by more than $2.5 billion under the FTA’s
first year. FTA proponents have shamelessly touted “gains” in U.S. auto exports
without revealing that this increase totaled just $130 million, with fewer than
1,000 additional U.S. automobiles sold in Korea relative to the 1.3 million
Korean cars sold here in 2012.

May 07, 2013

Public Citizen and Sierra Club Denounce World Trade Organization Attack on Successful Clean Energy Program

In Final Appeals Ruling, WTO Orders Canada to Roll
Back Green Jobs Program

A World Trade
Organization (WTO) final ruling against Ontario’s successful renewable energy
incentives program, which has reduced carbon emissions and created clean energy
jobs, underscores the threat the WTO poses to a clean energy future, Public
Citizen and Sierra Club said today.

In November 2012, the WTO ruled
that Ontario’s incentives program for renewable energy companies at home – or
“feed-in tariff” program – violates WTO rules that forbid treating local or
domestic firms and products differently from foreign firms and products. On
Monday, the WTO struck down Canada’s appeal of that initial ruling in a
decision that went even further to condemn the green jobs program as a
violation of WTO rules.

“By ordering the rollback of a
successful program that is reducing carbon pollution and creating green jobs
after recently sacking three popular U.S. consumer protection policies, the WTO
is destroying whatever shred of legitimacy it still had after years of imposing
its anti-consumer, anti-environment dictates,” said Lori Wallach, director of
Public Citizen’s Global Trade Watch. “Just like the WTO rulings ordering the
U.S. to gut popular laws on country-of-origin meat labels, dolphin-safe tuna
labels and limits on candy-flavored cigarettes marketed to kids, this latest
attack against an initiative promoting renewable energy, localization and green
job creation is simply unacceptable.”

Ontario’s renewable energy incentives
program was established under the Green Energy and Green Economy Act of 2009.
It increases incentives to develop clean and safe renewable energy by
guaranteeing that the provincial public electricity utility, Ontario Power
Authority, will pay a preferential price for 20 years to companies for the
wind, solar and other clean energies they produce. Although the program is new,
it already has achieved significant success, including contracts for an
estimated 4,600 megawatts worth of clean energy and the creation of more than
20,000 jobs in just two years.

“As people around the world grapple
with consequences of the climate crisis, their governments should and must use
every tool available to reduce dangerous carbon pollution and create new clean
energy jobs,” said Ilana Solomon, Sierra Club trade representative.
“To avoid climate chaos, the WTO needs to get out of the way of
innovative and successful climate solutions and job creators.”

The Sierra Club and Public Citizen
support calls of Canadian allies, including the Council of Canadians, to keep
Ontario’s renewable energy incentives program in place.

May 01, 2013

Last week 12 Latin American governments gathered in Guayaquil, Ecuador to craft a common response to an increasingly common menace: costly "investor-state" suits in which foreign corporations are dragging sovereign governments to extrajudicial courts to demand taxpayer compensation for health, environmental, and other public interest policies.

Ecuador, the host of this "Ministerial Conference of Latin American States Affected by Transnational Interests," has taken a particularly hard battering from the investor-state system enshrined in NAFTA-style Free Trade Agreements (FTAs) and Bilateral Investment Treaties (BITs). The country currently faces a ruling from one tribunal to hand $2.4 billion to Occidental Petroleum after Oxy broke Ecuador's hydrocarbons law, while confronting a ruling from another tribunal that the government should breach its own Constitution and block the enforcement of an $18 billion court ruling against Chevron for massive pollution of the Amazon. Many of the other countries present have also faced a taxing litany of investor-state cases in recent years: Mexico (e.g. losing $170 million in a NAFTA-created tribunal to the same U.S. agribusinesses that, under the same NAFTA, displaced over two million farmers), Argentina (e.g. losing a slew of cases to foreign financial firms for using financial regulations to mitigate the country's 2001 financial crisis), Guatemala (e.g. losing $13 million to a railroad company that failed to build a railroad because the tribunal thought that the government had failed to fulfill the company's expectations), etc.

These countries have indeed been "affected by transnational interests." And they are tired of it.

So they put together a conference, officiated by Ecuador's foreign minister Ricardo Patiño, to address the investor-state system that has empowered a multitude of foreign corporations to mount a skyrocketing number of challenges against the public policies of sovereign goernments. Several civil society organizations from around the world attended to deliver presentations on the dangers of the investor-state system. I was there on behalf of Public Citizen and summarized the exceptionally broad privileges that unaccountable tribunals have granted to foreign investors in this Wild West frontier of international law, and the equally broad array of public interest policies that have been directly attacked as a result. Cecilia Olivet of the Transnational Institute detailed the deep conflicts of interest among the private attorneys who alternate between acting as judges in investor-state tribunals and as prosecuting lawyers who bring the cases on behalf of corporations. Martin Khor of the South Centre explained that while attacks on public interest policies have grown under this investor-state system, foreign investment (the ostensible objective for such an extreme system) has not--study after study has shown no correlation between binding a country's policies to this anomalous regime and attracting foreign direct investment.

At the end of the day, seven of the governments present signed a declaration to coordinate efforts in seeking to replace the investor-state regime with an alternative investment framework that respects sovereignty, democracy, and public wellbeing. They announced the launch of an International Observatory, a intergovernmental commission based in Latin America to audit investor-state tribunals, draft alternative investment agreements, and collaborate in strategies for reform. The group will be headed by an executive committee that will help Latin American countries exchange information about emergent investor-state cases and collaborate in mounting defenses against such claims. Representatives from the remaining five governments participated as observers and are now taking the declaration back to their capitals to discuss joining the emerging Latin American coalition.

By launching this effort, these dozen Latin American countries are joining a mounting effort by governments to halt, renegotiate, or leave the now-notorious investor-state system. Australia has publicly refused to sign on to the proposed expansion of the extreme regime in the Trans-Pacific Partnership FTA, despite significant U.S. pressure to do so. India has moved to abolish investor-state dispute clauses in FTAs. South Africa is re-examining its policy on investor-state disputes and has refused to renew BITs with the EU. And now Ecuador's National Assembly is considering a bill to terminate its investor-state-embodying BIT with the United States. Last week's conference adds another dash of momentum to this growing global push to ditch this rather radical regime.